What is a Delaware Statutory Trust (DST)
A Delaware Statutory Trust (DST) is a legally recognized trust that is set up for the purpose of business, but not necessarily in the U.S. state of Delaware. It may also be referred to as an Unincorporated Business Trust or UBO.
Delaware Statutory Trusts (DST) are formed as private governing agreements under which either
- property (real, tangible, and intangible) is held, managed, administered, invested, and/or operated; or
- business or professional activities for profit are carried on by one or more trustees for the benefit of the trustor entitled to a beneficial interest in the trust property.
Delaware Statutory Trust (DST) investments are offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings. The Delaware Statutory Trust (DST) property ownership structure allows the smaller investor to own a fractional interest in large, institutional quality, and professionally managed commercial property along with other investors, not as limited partners, but as individual owners within a Trust. Each owner receives their percentage share of the cash flow income, tax benefits, and appreciation, if any, of the entire property.
The Delaware Statutory Trust (DST) ownership option essentially offers the same benefits and risks that an investor would receive as a single large-scale investment property owner, but without the management responsibility. DST Investments are located throughout the United States. Property types may include multifamily apartment communities, office buildings, industrial properties, multi-tenant retail, student housing, assisted living, self-storage facilities, medical office, single tenant retail properties, and others.
History of the Investments
The concept for business trusts, especially those that involve the holding of property, dates back to 16th century English Common Law. In Delaware, it was not until 1947 that Common Law began recognizing statutory trusts. No legal recognition of statutory trusts existed until the passage of the Delaware Statutory Trust Act (DSTA), 12 Del. C. 3801 et. Seq., in 1988. Under The Act, developed on the premise of trust law, statutory trusts were now recognized as their own legal entity, separate from their trustee(s), offering freedom from the corporate law template. Within the tradition of trust law, freedom of contract allows the trustee(s) to structure their entity in a way that is most beneficial to the relationship of all parties and their expertise, while offering liability protection similar to that of a Limited liability company or Partnership. Since the year 2000, Delaware Statutory Trusts (DST) have increasingly been used as a form of tax deferral, asset protection, and balance sheet advantages in real estate, securitization, mezzanine financing, real estate investment trusts (REITs), and mutual funds. Massachusetts, another state that has trust law, refers to its legal entity as a Massachusetts business trust. Most states, however, still rely on Common Law to oversee the trusts within their jurisdiction.
Delaware Statutory Trust (DST) Investments Under Investigation By Galvin Legal, PLLC
- Modesto Retail Center DST – Investor Alert
- Park Creek Steeple Multifamily DST – Investor Alert
- RK Edwards Mill DST – Investor Alert
- CSRA Ashford Club Apartments DST – Investor Alert
- Starboard Mountain Ranch DST – Investor Alert
- BR Big Creek DST – Investor Alert
- BR Arbys Toledo Investments – Investor Alert
- BR Arboretum – Investor Alert
- BR Ansley DST – Investor Alert
- BR 1355 First Avenue S – Investor Alert
- JLLX Johns Creek DST – Investor Alert
- CS1031 Abbington Place Apartments DST – Investor Alert
- CS1031 SE Apartment Portfolio DST – Investor Alert
- CS1031 2000 West Creek Apartments DST – Investor Alert
- NB Molly Barr DST – Investor Alert
- NB Grant Street DST – Investor Alert
- CS1031 Bedford Parke Apartments DST – Investor Alert
- CS1031 Hickory Creek Apartments DST – Investor Alert
- CS1031 So Cal MOB DST – Investor Alert
- CS1031 Houston Memory Care II DST – Investor Alert